The landmark free trade agreement (FTA) between India and the United Kingdom is set to uncork a new era for British whisky makers, as import tariffs on Scotch are slashed, unlocking access to one of the world’s fastest-growing spirits markets.
The deal, finalised in early 2025 after years of negotiation, will cut India’s steep 150% federal tariff on Scotch whisky by half, with further reductions set to follow over the next decade. UK distillers have hailed the agreement as a major breakthrough, with the Scotch Whisky Association projecting export growth of £1 billion over the next five years.
“This is a historic opportunity,” said Mark Kent, Chief Executive of the Scotch Whisky Association. “India is already the world’s biggest whisky consumer. With fairer access, Scotch can finally compete on a level playing field.”
Watch Video: https://player.vimeo.com/video/1079371968?h=df9906913a
India’s Thirst for Premium Whisky
India drinks more whisky than any other country—more than 2.4 billion bottles a year. While most of it is locally made and molasses-based, there is a booming demand for premium and imported whiskies among India’s growing middle class.
Imported Scotch currently accounts for just over 3% of the whisky market by volume but commands more than 30% of the premium segment, according to industry data.
“We’re seeing 20 to 25 million Indians reach the legal drinking age each year,” said Ankur Jain, an independent liquor industry analyst. “That’s a massive, young consumer base developing a taste for global brands.”
UK Brands Eye Market Expansion
British distillers are preparing to ramp up their presence in India. Glenmorangie, one of Scotland’s most iconic brands, has signalled its intent to make India its largest export market within a decade.
“This deal allows us to reduce prices and expand access,” said Caspar MacRae, CEO of Glenmorangie. “India is a dynamic, exciting market, and we’re investing accordingly.”
The tariff reductions will not only make Scotch more affordable but also encourage new entrants from the UK, including smaller, boutique distillers previously priced out of the Indian market.
Trade Ties Strengthened
The whisky breakthrough is part of a broader FTA that covers goods, services, and investment. UK officials have framed the agreement as a key part of Britain’s post-Brexit trade realignment.
“This deal reflects the modern, forward-looking partnership we want with India,” said UK Business and Trade Secretary Kemi Badenoch. “It will create jobs in both countries and deepen ties between two historic trading partners.”
India, in turn, gains tariff relief on textiles and services, while maintaining protections for its domestic distilleries, which dominate the budget end of the market.
Challenges Remain
Despite the optimism, industry players caution that India’s fragmented state-level alcohol regulations remain a hurdle. Each Indian state imposes its own duties and distribution rules, complicating logistics for importers. Still, most analysts agree the long-term trajectory is clear.
“Scotch is about to get a lot more visible in India,” said Jain. “The FTA just opened the tap.”
Leave a Reply